Differences Between Network Marketing Compensation Plans

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The following article will detail out the main differences between Network Marketing compensation plans and how to effectively compare these compensation plans.

MLM or Network Marketing has exploded on the scene in the last ten years and has not only created income streams that help the average family make it in today's economy, but has also created mutli-millionaires across the globe by distributing cash through commission structures only known in this industry.

MLM or Network Marketing has 4 different compensation plans. Each style differs based on how the commission is spread among the business partners. The main types of Network Marketing compensation plans include; Unilevel, Stairstep Breakaway, Matrix, Binary and Hybrid plans.

The Unilevel model is the simplest one. This design allows a person to recruit unlimited “frontline” distributors for the product. In turn, the frontline distributors are encouraged to recruit more distributors, and on and on it goes. Commissions can be paid up to seven levels deep or even deeper. In other words, a person 7 or more levels underneath you is still creating income on your check based on their product purchases.

The Stairstep Breakaway model is designed to support individuals as well as group sales. In this model, a group leader is assigned with multiple recruits under them. The goal is to achieve a set of volume of sales in a specific period of time. Once the volume is achieved, the distributors are allowed to move to a higher commission level. This model continues up to a certain limit, after which the distributor breaks away and this pattern of commission ceases. From this point and beyond, other commissions and incentives are provided to the distributors. Often, people are not able to stick with this type of model because of the “quotas” set on people. They become frustrated not making their quotas each month and end up letting the business go.

Matrix models are similar to the first type, except that only a limited number of distributors can be sponsored at any level, and once that preset number is reached, another matrix can be started. Again, this is another model that does not allow people to maximize their compensation because it limits the amount of people one can have on their frontline.

Binary models allow only two distributors to be sponsored in the frontline, and if there are more sponsors, they spill over to the next level. So at any level, only two distributors are required to complete the compensation plan. Also, the compensation has to be balanced between the two distributors at any level, such that the volume of sales does not exceed a certain percentage of the distributor’s total sales. Once more, there is a limiting factor to this model.

Finally, Hybrid models, combine any of the above mentioned compensation plans.

What is the best type of Network Marketing compensation model?

Overall consensus says that the Unilevel model is the one that allows people to generate the most cash as possible. The reason being is two fold; 1) there are NO quotas that are required of a person. This allows a person to build at a pace that is comfortable for them. They can build their businesses fast or slow over time without any pressure from the company. 2) A person can be paid on as many levels as has been built. It also helps that one can have as many people as they want, all on their first level. This keeps the income close to the one enrolling the people which equates to the real value going to the person being the most productive.

One of the best Unilevel MLM compensation plans, the best type of compensation plan, on the market today is with Life Force International. Life Force pays to infinity meaning one can be earning percentages of products on ALL the levels that are in one’s organization. Secondly, 60% of EVERY dollar that comes into the company is paid back to the distributors. The average MLM pays out 38%, therefore, Life Force is almost double the average. What this means is that the average person can get into profit IMMEDIATELY. This snowballs into other positives. The main reason people leave the MLM industry is that they are not making money quick enough. Well, if you have a compensation plan that pays this well, there is a much higher percentage that will stay in the business. This cuts down on the attrition rate and keeps the organization you are building more solid and helps it to develop quicker and stronger over time.

If you would like to review Life Force’s compensation plan, please visit our compensation page. Life Force International is also in the highest standing with the Better Business Bureau and is a member of the Direct Selling Association.

To learn more about how to join Life Force International as a business partner, visit our “Join Now” page. We have Life Force distributors/business partners all over the United States, Canada, Singapore, Australia, and New Zealand. In the United States, our team represents Colorado, Minnesota, California, Arizona, Florida, Maine, New York, and several other states.

We would love to have you on The Balance You Need Team!

Ben & The Balance You Need

Differences between Network Marketing compensation plans.

About the Author:

Professional Network Marketer and accounting, marketing, MLM, and business strategist consultant. Ben is a father of 4 and married to Jessica Mueller. The family resides in Westminster, CO.